Can you describe a specific example from your experience?
I have seen some examples of boomerang customers — customers that leave and come back. When you offer top-of-the-line products and services, some customers might balk at the price and say, ‘I can get a cheaper system and reduce costs.’ But, half-price equipment and service often leads to half-rate quality. You’ll end up spending more time fixing the problems caused by the lesser quality equipment and/or service, thus distracting you from other more important tasks. After all that hassle, most customers return back to the quality equipment or service, which makes them boomerang customers.
In today’s environment of ‘frugalnomics,’ how do you sell against something that is half price?
Ask questions to help clarify why a prospect may or may not want to pay a premium over the cheaper option. Is your IT strategy aligned with your business strategy? What’s important to how you compete? Are you funneling IT dollars there?
For example, if you almost always e-mail with your customers, you might not want to pay for a premium voice communications solution. But why go half price? Skype is free! In fact, I have seen that as a perfectly acceptable business communication strategy for some businesses. However, if your business can’t afford dropped calls, then you should go with a managed network and quality equipment.
Another question to ask is, ‘Would you rather spend twice as much on a system that works the way you need it to or half on one that doesn’t?’ Put it in context. Are you willing to save $17 a month to have intermittent problems with your voice communications and have your IT staff focused on something that is not moving the business forward?
How does the emergence of cloud technologies impact CDD?
The cloud is the solution to CDD. Well, not quite, but the availability of cloud-based IT solutions offers some cures for CDD. One primary benefit is the reduction in wasted software licenses. A 2001 study claimed that 30 percent of software that companies bought was never even deployed — costing businesses an astonishing $130 billion. The primary reason was that IT personnel did not have the time to develop a competency to get the software up and running.
The great advantage of Software as a Service (SaaS) is that you can start with one seat, try it out, and if it works, scale from there. If not, turn it off. Another big cure is the ability to have a support staff that knows the product when you need it. A lot of times when a system breaks, it might not have been touched for months. Your support staff might not even remember the log-in password. You can’t have competency in a system that is barely used and you can’t afford to pay someone to maintain that expertise. I have Cisco Certified Engineers on staff that cost more than $100,000 and use that skill every day. The point is to choose — narrowly — the systems your IT team should focus on and find good cloud-based providers who have that competency for the rest.
MARK SWANSON is the CEO of Telovations Inc. Reach him at [email protected].
